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Is Natural Gas Really Cheaper?

By DesiredUsername in Technology
Thu Jan 18, 2001 at 02:43:59 PM EST
Tags: Politics (all tags)

I've done some simple research and, even with the current high prices for oil, natural gas is almost exactly equivalent in price in my area.

I'm buying a house in southern New Hampshire. The inspector found that the furnace needs to be replaced and that hot water heater is at the end of it's projected life span. The current furnace is fuel oil, the water heater is electric.

I've always heard that natural gas is much cheaper so I decided to figure out whether I could save money by switching (since I have to buy new units anyway). I did some searching and came up with approximate prices for oil and natural gas and a conversion factor. Here's a sample calculation:

Let's say the furnace uses 1000 gal/year*. 1 gal of fuel is 148,000 BTUs, so that's 148,000,000 BTUs in 1 year. 1 gallon of fuel also costs about $1.40 (in this area) so that's $1400 for a year's oil.

The pricing (from EnergyNorth) for natural gas is by "therms" (100 ft^3). 1 therm is 100,000 BTU. So to get the same heat from the furnace I'd need 1480 therms. The pricing changes by season from ~$.70 for the spring/summer/fall to $1.10 for the winter. But since most of the heating will be done at the higher price, I estimate the yearly avg to be about $1.00/therm. That's $1480 for a year's use.

Difference between oil and natural gas: $80 over the course of a year. Advantage oil.

I can think of only two explanations for this.

1) 100,000 BTUs/therm and 148,000 BTUs/gal may represent a theoretical maximum. If natural gas furnaces are more efficient than oil furnaces, it would tip the balance the other way. But given that oil and gas are nearly equiv already, the efficiency difference would have to be pretty big to make a difference.

2) Someone is scamming someone. There are many good non-financial reasons to use natural gas (environment, etc). But one advocacy site I found breathlessly reported that I could save up to 5% by switching to gas from oil. Ummm...wow. Admittedly gas over electric seems to be a big savings (50% or so) and so I might save some money by switching the water heater. But going to all that trouble just to save, say, $75/year on electricity seems like it's going overboard.

Can anyone out there leap to the defense of natural gas in strictly financial terms or has the wool been pulled over our eyes?

*(The amount of oil used for the furnace (and electricity for the water heater) is unknown because a) the owner died and b) he wasn't there year-round anyway. So I don't have any hard numbers to go on from that direction.)


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Natural Gas...
o ...walks on water 8%
o ...eats babies 29%
o ...used to be cheaper 35%
o ...is getting cheaper 2%
o ...orthogonal to cost 25%

Votes: 48
Results | Other Polls

Related Links
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o Also by DesiredUsername

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Is Natural Gas Really Cheaper? | 32 comments (32 topical, editorial, 0 hidden)
You forgot some things in your calculations... (4.30 / 10) (#1)
by yankeehack on Thu Jan 18, 2001 at 11:22:43 AM EST

Well, first I have to comment that I hope you get to read this before the story gets voted down.

I just went through a smiliar situation, and a few thoughts went through my mind as I read your post.

First, you forgot to take into consideration that if you have oil, you usually have to get a service contract with a dealer. These suck because you have to hope the guy comes in time to fill your 500 gallon tank. Plus, the dealer usually wants to lock you into a certain rate for the season, and you will be stuck paying at that rate. Natural gas, on the other hand, is piped into your house and administered by a local utility.

Secondly, the advantages of oil/natural gas also depend on how big your house is 1500sq ft? 2000sq ft? 2500sq ft?, how old your house is, and if the home is weatherized properly.

Third, any savings you might get from a new efficient furnace are not noticable for a while because new efficient furnaces (90% eff) are of course more expensive than (80%) furnaces.

Finally, take into consideration what is popular in your area to heat homes. If you are one of the only guys on the block using oil, that could devalue your home when you go to sell it. (I live a little more north of you and folks use natural gas here.)

Hope that helps, also take into consideration that your home inspector might be exaggerating things a bit in your favor so you can have some leverage with the sellers for repairs/rebates at closing/etc. (if that is even an option in your ratified offer).

No one who was bad in bed has ever been good in life (i.e. liberals, I've never had sex with a liberal woman who knew how to use her body.) Keeteel :-P I'm *right*!

Hmmmm (3.75 / 4) (#3)
by DesiredUsername on Thu Jan 18, 2001 at 11:31:16 AM EST

1) Why would it be voted down?

2) Why do the advantages depend on house size? That's an invariant, isn't it? The oil/gas isn't heating the house directly...it's heating air which is then blown around the house. Anyway, if it helps you help me the living space is about 1200 sqft not including the full, unfinished basement.

3) Your comments about more expensive, high-eff furnaces and resale value are well-taken. In fact, one of the reasons I might switch even if gas is more expensive is so I can get a smaller furnace and lose the oil tank to gain room in the basement. Then I can remodel some living space down there which of course adds a lot of value.

4) Actually, the furnace was inspected on the seller's dollar so I would expect him to come in on their side. Even so, the seller's have offered us a $2500 credit to replace the furnace.

Play 囲碁
[ Parent ]
reply (3.00 / 1) (#9)
by yankeehack on Thu Jan 18, 2001 at 11:53:27 AM EST

1)Don't take the "if this doesn't get posted" comment personally. I was anticipating a large number of k5ers nuking the posting because they couldn't relate to it.

2)I was just trying to find out what type of home you had because building type (which I failed to ask about) affects the efficiency of your home. A colonial or cape or even a raised ranch/split level with a second floor will be easier to heat than a one level ranch. Forced air is usually considered the least effective heating system (because of hot air's tendency to rise to the ceiling), and hot water baseboard heat the most effective.

3)Basement remodeling is a good thing, just make sure it doesn't leak though (and sellers don't tell you things like that! :-P )

4)Lucky you that you were able to get the sellers to pay for the inspection.

No one who was bad in bed has ever been good in life (i.e. liberals, I've never had sex with a liberal woman who knew how to use her body.) Keeteel :-P I'm *right*!
[ Parent ]

More stuff (3.75 / 4) (#5)
by jabber on Thu Jan 18, 2001 at 11:39:17 AM EST

In CT, I do not need a service contract for oil delivery. Each time I buy oil, I shop around. Since I have multiple tanks, I can afford to wait (of course there is a risk involved) until the price dips. I can also buy a LOT of oil at a time, and often manage to negotiate a volume discount.

Another thing to consider is that, especially if you have ample storage for oil, you can buy it in August and use it in January. With gas, you pay as you play, and are more subject to the higher prices of the heating season.

Oil smells, gas explodes. Oil, in a forced air system, tends to make the house a bit dirty.. Gas is cleaner. If the house is old, you'll notice little difference. IMO, and this is just a 'sense', gas tends to be a much drier heat.. Oil seems to leave more moisture in the air. Think static, skin conditions.. A humidifier in the heating system is an inexpensive way to get rid of this problem.

If you prefer dealing with small business suppliers, oil is your thing. You'll need more service calls than with gas. Gas == Big Business, like dealing with the phone or cable company. My oil guy is very responsive and can usually get things fixed the next day. I can also call someone else, if my usual guy can't accomodate me. Gas, by proxy experience, schedules you for 'later in the week', and a guy in a uniform shows up in a nice clean van.

Oil guys are like independent auto mechanics. Gas guys are like auto mechanics from Sears or Jiffy Lube, or a One Brand Dealership. If your relationship with the oil guy goes to pot, you have choices. If the gas company screws you, you're SOL.

Also, as already mentioned, insulation, weatherproofing, good windows and doors.. These make a big difference regardless of how you heat. Planting shrubbery on the windward side of the house also helps.

[TINK5C] |"Is K5 my kapusta intellectual teddy bear?"| "Yes"
[ Parent ]

I've got gas - Natural gas. (4.55 / 9) (#2)
by Nodecam on Thu Jan 18, 2001 at 11:30:56 AM EST

The reason that you're seeing such a lack of advantage is the high price of Natural Gas right now. The price of Natural Gas has gone right through the roof in the past 6-10 months.

I work in the fertilizer industry (please no BS jokes :) and Natural Gas is a major input to Nitrogen production. As a result of the high natural gas prices in North America, most (all?) of the Nitrogen production in NA has been shut right down. This has led to higher Nitrogen prices, which benefits Nitrogen producers elsewhere in the world (ie. South America) where natural gas is significantly cheaper.

On a personal note, my gas bills have gone up in the neighborhood of 50% in the last 4 months (from C$80/month to C$120) due entirely to the increase in gas prices (I'm on equalized payments, so that seasonal usage patterns don't affect my budgeting)

The scary thing is that a this increase would be higher, if the gas company wasn't a crown corp. (ie gov't owned)


Why the rise? (3.50 / 2) (#4)
by DesiredUsername on Thu Jan 18, 2001 at 11:35:50 AM EST

Petroleum products have risen in price as well. Why has gas risen disproportionately?

Play 囲碁
[ Parent ]
disproportionately? (3.00 / 1) (#10)
by Nodecam on Thu Jan 18, 2001 at 11:54:34 AM EST

Well, it comes down to supply/demand I guess. All I really know is that natural gas prices have gone up significantly (like 70's energy crisis significantly) in the past year. I'm not talking 10%, I'm talking 200% (rough figures, completely from memory)


[ Parent ]
It was disproportionally low before (5.00 / 1) (#16)
by RGRistroph on Thu Jan 18, 2001 at 01:53:49 PM EST

I think that natural gas was disproportionally LOW before the recent rise. That is, if you look at all fuels in terms of price per BTU, or per watt, or per calorie or something, and ignoring other factors, then natural gas was by far the cheapest.

My facts about this are gleaned from reading various articles about the natural gas industry here in Texas; if you want good evidence, I suggest looking through the New York Times' recent articles on the California energy debacle. The background information in those articles (I think there is a good opinion piece as well, today or yesterday) basically lay out the following:

  • NG was always a bit behind in utilization, because it requires more investment to build the infrastructure to deliver it.
  • The government used to exercise price controls on NG, back in the late 70s or early 80s. These kept the price artificially low. But it took a long time for the effects of the release to work their way to the market, because natural gas burning power plants are long term projects.
  • You also might look into the history of Apache, not the web server, but a company in Houston that was an upstart (immagine a starting a new company in the petroleum industry -- it's a lot harder than throwing up a web server and writing some software) that focused on natural gas right around that time, when most of the big huge oil companies were ignoring gas as an unlucretive niche of the market.
  • Result: in the last few years, 90% of the additional electricity producing capacity added in the US has been natural gas powered power plants.
So I think that the recent increase in prices is just part of long term balencing, as price per energy unit in the various fuels all come to equal each other. If you believe this, then you would not expect the price of NG to go down that much in the future. On the other hand, I think it will dip at least a bit, because we have a lot more known natural gas fields than oil fields.

One thing to consider, which a few posts here have mentioned, is that the consummer has a little less control over the natural gas supply, being tied to single utility and unable to accumulate and store it. Whereas you can store reasonable quantities of fuel oil, and buy from a number of suppliers. Being in the Northeast I'm sure you remember the uproar over the spike in fuel oil last winter ? Basically the stored supply ran out in the northeast; one thing to remember is that fuel oil is basically diesel fuel, so in such a shortage you compete with all the transportation demand.

I would suspect that the balence falls towards natural gas. One thing to consider, is that if you have a natural gas line, then at somepoint in the future you might save on electricity with one of these : a natural gas fuel cell that will power your home. There are no pictures on that page, but basically it is grey refrigerator sized box that sits outside the home on a concrete pad, similar to one of those heat pump airconditioners; a pipe carries natural gas to it, the natural gas is "rectified" with steam (I think) before being passed into a fuel cell, which converts the fuel to energy, taking oxygen from the air through vents and passing out water vapor and carbon dioxide. Supposedly the device gets about twice the electricity out of the gas that the electric company does; I think a large portion of that must be the transmission loses you avoid, otherwise the power plants would all use fuel cells instead of turbines.

Come to think of it, maybe they should start selling these out in California.

[ Parent ]

Fuel cells (none / 0) (#17)
by DesiredUsername on Thu Jan 18, 2001 at 02:34:06 PM EST

Actually, I wanted to sign up for the trial of the very device you linked to--unfortunately the trial is over (can't sign up anymore, anyway) and I don't even own the house yet.

On the other hand if what you say about balances has any merit (and it probably does) then won't electricity prices start to fall once nat gas fuel cells take off? I suppose I can save money during the ramp up period, but will I recoup the $4000 price tag?

Play 囲碁
[ Parent ]
Falling electric prices (none / 0) (#22)
by RGRistroph on Thu Jan 18, 2001 at 05:52:00 PM EST

Yeah, the economics of it would suggest that electricity prices would fall if those devices became popular. (By the way my Mom was also going to try to get in on the test, but was too slow.)

But of course it is not all just zero-sum competition between you, other consumers, and suppliers. It may be the case that it is physically more efficient to deliver electricity by delivering natural gas and then converting it on the spot rather than by converting it centrally and then distributing it by wires. If the industry moves to a physically more efficient method, prices will drop over all. Maybe it doesn't matter so much that YOU are the one using the fuel cell, so long as enough people are using them it takes demand away from the other suppliers of electricity.

I like the fuel cell thing because I think you loose gas pressure less often than you loose electricity; the device is hooked into the electric grid anyway as back up and in case a spike of your useage exceeds the capacity of the cell; and I suspect that the burning of natural gas in the cell produces much less pollution (in terms of half-burned stuff and N02 and N0) than burning in turbines, which is a cost that may neo be reflected in the prices you pay.

The fuel cells are probably most needed in areas at the ends of long transmission lines; there is where they woudl save the most. GE was hyping the things for rural use, probably a smart idea.

Diversity in power sources is probably a good thing, helps avoid California-like fiascos.

[ Parent ]
Fuel Cells (none / 0) (#26)
by Hamshrew on Thu Jan 18, 2001 at 11:37:45 PM EST

I'm working on the inverter for a fuel cell, so I know a lot more than I ever wanted to know about them. The reason they're marketed for rural areas is due to the high cost, which means it isn't a viable alternative to the grid. However, companies hope to have the cost way down very soon now. The inverter I'm working on is supposed to cost roughly 1/5 of the going rate.

You are right about the pollution, though. Fuel Cells powered by natural gas produce CO2 and water as waste(along with heat, but we found a solution to that), and those powered by pure hydrogen produce only water.

Oh, and you can take the house off the grid. I don't know if it's standard, but our design has a set of backup batteries which recharge in low usage periods, and take the extra load during usage spikes.

- Hamshrew
-- This is my sig(show picture here)
[ Parent ]
Gods of EPF (none / 0) (#23)
by Matthew Guenther on Thu Jan 18, 2001 at 06:26:04 PM EST

The price of natural gas has also been affected by what my energy systems professor fondly refers to as the "Gods of Energy Planning Foolishness". During the oil embargo in the 70's, because of various media hype jobs and general stupidity, natural gas was forbidden to be used for anything other than heating. Once that regulation was lifted people started building power plants using it because it's cheaper, more efficient, and cleaner. As well, the price has been cheaper because it isn't burdened with the taxes that oil is, mostly because it isn't nearly as prevalent in the transportation market.

Another item to note about the price of natural gas is that unlike fuel oil, which is refined from crude of which the majority is imported from the middle east, natural gas production is almost entirely domestic (or at least continental). Therefore you (indirectly, and over the long term) will have much greater control over your fuel than if you rely on oil.

I believe that it will take very little time for the floor to fall out from under gas prices, simply because there is a ton of supply that is currently being flared off because the past price of gas has been too low to economically transport it from more distant wellheads to metropolitan centres. With these new high prices, companies will be scrambling to cap those flares and hook the wells up to the nearest pipeline. The historic trend for natural gas has been to be ~1/3 the cost of oil, and I can't see this latest spike lasting in the long term.

Furthremore, something you might want to consider in your economic analysis are "external" costs. The price of oil, furnace, and storage are internal, but did you think about the costs of using a dirtier (higher C content) fuel? These include increased particulate matter in the home (long term medical expenses), aesthetic cost (try moving a painting on a light-coloured wall after a few months, you'll be able to see where it was quite easily because of the soot), noise, and although it's hardly immediate the environmental cost of the increased pollution. These costs are rarely considered, but they do exist and must be considered for a truly "fair" comparison. I think if you look at all of the costs, you will find natural gas comes out much better.

Finally, the notion of being able to convert to a residential small-scale power generation is a good one, but it probably won't show up as anything other than early-adopter fodder for quite some time (despite what the companies might say). Some interesting reading is here and here.


P.S.: RGRistroph, please be careful if you're going to talk about fuel cells, get a book or at least read something like this, or a good thermodynamics text, and figure out how they work before you start misinforming people. I have no idea where you got the 2x figure from but I would learn to be more skeptical.

[ Parent ]
2x figure (3.00 / 1) (#28)
by RGRistroph on Fri Jan 19, 2001 at 12:37:29 AM EST

The 2x figure is from the original gepower.com story linked to from slashdot; the link has since gone dead. What they said is that they were using half the gas to power your house as the electric company would. The context, if I remember correctly, was in comparing the amount of CO2 put into the atmosphere due to your house in each case. As I said above, they must be playing around with the transmission cost numbers; they are talking about the system as a whole, not the standalone efficiencies of fuel cell versus big turbine.

I know that in isolation, turbines (at least the big ones) beat the fuel cells. This page suggests that gas turbines are around 58 to 60 percent efficient. One of the links you gave mentions a fuel cell that is 40 percent efficient, but there are other numbers around also. (Sometimes the efficiencies of fuel cells are listed higher, but look carefully and it is often for pure hydrogen fuel, and the natural gas cells first have to make hydrogen from the natural gas.)

But the difference is that if you look at the two systems as a whole, the turbines are big and expensive and therefore centralized with a distribution system that spends a lot of energy just getting the power out there. It might be the case that it costs much less to distribute power in the form of gas, through pipes. It is on the border of plausible; a large portion of the electricity generated is spent in transmission, but I don't know what percentage. It's big though, something like a quarter or a third.

This gets a bit off topic from the gas versus oil question, but the reasons I looked into some of this originally wasn't for home use. It was because this crazy nut I know was telling me that he thought fuel cells were used for powering some small, ultra quiet submarines. Basically a diesel-electric with no noisy diesel engine even for recharging. He was talking about our military attack subs going non-nuclear. I was trying to figure out if it would be possible to build a small sub with a high-pressure fuel tank and banks of fuel cells, something on the scale of the submarines drug cartels are alledged to have built. I have no idea if you can or not. I think he is just a nut.

[ Parent ]

It's about the storage supplies... (4.50 / 4) (#15)
by djx on Thu Jan 18, 2001 at 01:38:34 PM EST

Recently, with the mild winters and the subsequent reduction of natural gas consumption, storage rates were lowered to prevent the gas companies from having natural gas in storage facilities that they paid more than they can get back for.

Now that a nice hard winter has come around, the storage facilities have little to nothing left, therefore the price goes up. The main reason for this is that most of you Yankee's natural gas comes from down here (Hi from Texas, by the way). The gas companies have to pipeline it up to the Northeast. Transmission costs are high, although the cost of transmission is nowhere near the increase in the end user price of gas.

Add corporate greed and price gouging into the mix, and there's your answer.

Now for something a little more on topic to the article... Fuel oil, which roughly compares to diesel in terms of prices, will generally be more expensive than natural gas. The reasoning for this is that fuel oil is actually a refined product (despite the little refining that is actually done to it), while natural gas is typically a waste product from wells. Way back in the day, natural gas was flared off at the wellhead and disregarded as useless. It still is technically considered a waste product from the wells, although the drilling companies profit from the gas sales. Another reason that natural gas is usually cheaper than fuel oil is the fact that natural gas is not refined. It contains several hydrocarbons (including propane, butane, and others), and is usually only filtered, not cracked. Fuel oil, like diesel and bunker, are the low settling byproducts of cracking crude. More money goes into cracking the crude for fuel oil than goes into filtering the natural gas.

Disclaimer: This is information that I have gained only through working in the pipeline industry, not from direct ties to the oil patch. I might be incorrect about a detail or two, but the general idea should be correct.

-<end of transmission>-
[ Parent ]
Just how volitile is price of gas compared to oil? (4.50 / 2) (#6)
by Anonymous 242 on Thu Jan 18, 2001 at 11:39:24 AM EST

Nodecam raised an excellent point:
The reason that you're seeing such a lack of advantage is the high price of Natural Gas right now. The price of Natural Gas has gone right through the roof in the past 6-10 months.

While any investment adviser will endeavor to make clear that past performance is guarantee of future returns, it seems to me that an analysis of the variability of the price of Natural Gas vs. Fuel Oil would be somewhat illustrative. In other words, the validity of the comparisson of the curent prices varies depending on how volitile the price of each alternative is.

My best guess is that the oil/gas question is really a crapshoot. It's like trying to decide whether to take a lower interest rate on a variable rate loan or a slightly higher but fixed interest rate. Depending on the volatility (and in which direction the delta occurs) in the future, each might be the best option.

[ Parent ]

Right through the roof (4.00 / 1) (#8)
by Nodecam on Thu Jan 18, 2001 at 11:49:37 AM EST

The funny thing is that Natural Gas prices have been historically pretty stable (I don't have the figures with me right now to back up this statement though)

The truly funny thing about it is that the increased prices are pretty much just affecting NA and Europe - natural gas in SA is way cheaper than it is here.

You're right though, pick your poison. If Murphy were here he'd tell you that you're bound to pick the wrong one :)


[ Parent ]
Missing Factor (4.00 / 7) (#7)
by Parity on Thu Jan 18, 2001 at 11:48:02 AM EST

You've left out a factor, but you'll have to do the calculations yourself; to prevent carbon monoxide poisoning, a certain amount of ventilation is required at the furnace. That amount of ventilation may be different for gas and oil systems.

(It also occurs to me that you get to reclaim that basement space taken up by the oil tank, which is, after all, worth something per square foot.)

Anyway, a friend of mine put one of those carbon monoxide detectors in the basement, and slowly decreased the ventilation until it beeped, and then opened it back up a few inches. (You need, of course, to close in small increments, because you need to leave it for an extended period of time to see whether the buildup triggers the detector.) This adjustment cut his usage to less than half, so it could make a dramatic difference if the ventilation requirements differ.

One day, presumably, there will be automated ventilation that opens and closes dynamically, but I think I will not buy version 1.0 of -that- product...

Parity None

Self-ventillating natural gas furnaces (3.00 / 1) (#18)
by zzyzx on Thu Jan 18, 2001 at 02:45:16 PM EST

Your friend is playing russian roulette. Carbon monoxide is scary poisonous, and at a minimum he should have a detector in his living area as well (what are the odds that the detector in the basement will wake him up??).

What he needs to get is a self-respirating natural gas furnace. In many communities, this is now the standard, so if you are upgrading, you will have to buy one of these. They have two pipes to the outside, one for intake, one for outflow, so the chances of dumping nasties in your living environment are minimized.

[ Parent ]
Bad time to be evaluating natural gas (4.16 / 6) (#11)
by regeya on Thu Jan 18, 2001 at 12:25:38 PM EST

Natural gas prices (in the U.S., at least) are insanely high. In my state (Illinois) our Governor has signed a bill that will give needy families aid (money) to pay their gas bills. It's that bad.

Example: I just got my power bill. Natural gas is handled by the electric company. My power bill is $485.23. Without the charge for gas, my electric bill would be in the neighborhood of $80.00.

Cheap, clean natural gas, ah, how we miss ye.

[ yokelpunk | kuro5hin diary ]

Ditto (3.00 / 1) (#14)
by antizeus on Thu Jan 18, 2001 at 01:34:17 PM EST

My gas bill shot up in November, from the range of US$5 to US$10 a month, to around US$30 a month. Variation due to season should have bumped it up to at most US$15, and that's being generous.
[ Parent ]
Gas is cheaper than electricity, but not oil (4.00 / 4) (#12)
by dyskordus on Thu Jan 18, 2001 at 01:24:11 PM EST

My wife works for a HVAC company. By far, the most economical setup is oil heat, followed by gas, then by electric.

Oil does have it's disadvantages though. The furnaces need more maintenance (new nozzles, etc), and the fuel has to be delivered.

If you do decide to stick with oil heat, be sure you get tank insurance. When and if your tank fails, it will have to be cleaned up to the environmental standards of your area, and that is expensive.

"Reality is less than television."-Brian Oblivion.

Natural gas just got about 4X more expensive (4.20 / 5) (#13)
by jbridge21 on Thu Jan 18, 2001 at 01:32:12 PM EST

Because, I believe, the demand just recently got larger than the supply.

Simple economics.

My experience: oil heat is evil (4.00 / 4) (#19)
by error 404 on Thu Jan 18, 2001 at 03:39:11 PM EST

But that could be because the only oil furnace I ever owned was a bit ancient.

When I replaced it with a gas furnace, the funny smell went away and my family stopped being sick so much.

And I no longer had to dig under the couch cushions to pay the oil guy - regular bills that can wait until the paycheck clears (bad situation involving a Reagan-era high-tech startup. Those were designed to lose money in ways that caused the investor's tax bills to go down a little faster than the company.) are one thing I appreciated about gas. You have an oil furnace and your tank runs low between paychecks? You get cold. My gas bills were far lower than the oil bills. Again - the age of the furnace was probably a major factor.

Old, old house. The oil tank was located in the old coal bin. I still own it, rent it out.
Electrical banana is bound to be the very next phase
- Donovan

Oil is the way to go.. (4.77 / 9) (#20)
by Zukov on Thu Jan 18, 2001 at 03:45:38 PM EST

I've been using oil for years, and at one time considered switching to natural gas. The natural gas industry had been putting lots of ads on tv and radio at the time, touting the benefits of "clean, safe, natural gas".

I went thru the same math as you have, and came to the same conclusion, oil is cheaper. Talking to gas-users confirmed this, the gas users had dramatically higher heating bills.

There are many ways to lower your oil bill, by a little advance planning, and the willingness to do some legwork. Most of these methods are not possible if you have gas, because:

  • You cannot store gas in advance-
  • There is no competition in the sale or delivery of gas.

    Let me say first, (I assume you have a forced hot water system, not forced hot air) that whatever boiler you get, MAKE SURE the sections are assembled with steel nipples, not rubber (plastic, elastomer) rings. The rubber rings will not stand up over time, the boiler will leak. (I visit a metal scrapyard regularly, they get in a lot of rubber ring boilers, and you can see where they leaked at the rings) Also, if you have a forced hot water system, you can use the tankless coil for hot water, and you avoid the expense and fuss of a seperate water heater.

    Here are the ways I pay less for fuel oil:

  • Call around to every dealer in the yellow pages near your area. Prices vary greatly from dealer to dealer, all the time. You can see what the commodity price of fuel oil is by looking in the Wall Street Journal, Section C, under "OIL PRICES", and this tells you the dealers markup.
  • Put in additional storage tanks for oil, and ask for a discount when buying this large quantity of oil. As you live in NH, where the plumbing inspector of your town is probably a reasonable person, you can do this work yourself. Used tanks in good condition are often posted in the Want Advertiser.
  • Buy your oil in one delivery in the summertime, not the wintertime.

    Clean your boiler at least once a year, change the nozzle in the burner, set the gap on the spark electrodes, change the little filter in the cannister by the oil tank. Set the oil pressure with a guage and the screw on the oil pump on the burner. Set the air/fuel ratio with the plate and band on the side of the burner. To do this properly you should get a carbon DIOXIDE (NOT Monoxide) meter. If you have no interest in setting this yourself, a tuneup call costs about $25. You can get a book from the libray on heating systems and oil burners if you want to learn how. It takes me less time to do a complete service on my boiler in significanly less time that it takes to install W98. I get more of a sense of accomplishment, as well :)

    I suggest you avoid any service contracts, tank insurance, etc. My experience has been that whatever breaks on your boiler is NOT covered by the contract. Fuel tank failures are very rare,(unless someone is putting salt water in your fuel tank) and you should see some seepage to warn you ahead of time there is a problem, giving you time to get another tank, transfer the fuel, cut the old tank in half (put in lots of dry ice first, to displace the oxygen inside before cutting) clean it out, and take it to the scrapyard.

    I realize you asked for just economic arguments, but since I have gone on for this long, I may as well contine a bit on why I feel oil is better.

  • A gas leak, while rare, often results in an explosion which destroys the house completely. I'm talking splinters. Suprisingly, the occupants often survive.
  • If gas service is interrupted, the gas company will break into your house (with a locksmith) so they can purge air out of the line and relight your pilot light etc. You may not appreciate this intrusion.

    If you have more questions, ask. :)

    ȶ H (^

    Yes, I have just bumbled upon Gnome Character Map. Please ! me.

  • my two cents (4.33 / 3) (#21)
    by yankeehack on Thu Jan 18, 2001 at 04:14:55 PM EST

    About this comment: Fuel tank failures are very rare,(unless someone is putting salt water in your fuel tank) and you should see some seepage to warn you ahead of time there is a problem, giving you time to get another tank, transfer the fuel, cut the old tank in half (put in lots of dry ice first, to displace the oxygen inside before cutting) clean it out, and take it to the scrapyard.

    It depends really on where your oil tank is located if it will give you problems. While it used to be an acceptable practice to bury tanks underground, it can now cause problems because if the tank fails (even if it fails just because of old age) you'll be responsible for cleanup (big $$ and lots of paperwork) and quite probably environmental testing. Not to mention that most people figure out their tank has been leaking after oil appears on the surface above. A buried underground tank was a big negative when I was looking for a house, just because of the possible liability concerns.

    No one who was bad in bed has ever been good in life (i.e. liberals, I've never had sex with a liberal woman who knew how to use her body.) Keeteel :-P I'm *right*!
    [ Parent ]

    I should have been more specific.. (4.50 / 2) (#31)
    by Zukov on Fri Jan 19, 2001 at 11:03:05 AM EST

    I agree with your point about underground tanks, they cannot be inspected to see if there is a problem without digging them up. Most people do not dig them up untill it is too late. The local law here says that if you dig a tank up, you must check the soil under it for oil leaks. The law does not say you _have_ to dig it up, though.

    Boilers and Oil Burners are very interesting to me, and I could probably go on for many pages about tricks and tips regarding them. It is surprisingly hard to write a technical post which contains _all_ the relevant information and yet is not too long.

    ȶ H (^

    Yes, I have just bumbled upon Gnome Character Map. Please ! me.
    [ Parent ]

    Propane (and other natural gases ) (3.00 / 4) (#24)
    by goosedaemon on Thu Jan 18, 2001 at 06:37:18 PM EST

    Natural gases, while intrinsically better than other fossil fuels for heating and the like, are much less plentiful. Why this makes natural gas a Bad Idea is left as an excercise to the reader.

    Huh? (3.50 / 4) (#27)
    by Matthew Guenther on Fri Jan 19, 2001 at 12:11:16 AM EST

    Where did you get this crap from? If anything there are greater quantites of light hydrocarbons in the environment available. Every time you drill a well for crude you invariably get gases that are either entirely or mostly composed of natural gas along with the oil. They even un-cap old oil wells to get at the gas left in them (after the oil has long stopped flowing economically).

    However, the relative amounts are more than enough to be considered inexhaustable for both weights of fuel, as if we use them at our present rates we invite catastrophic global climate change long before even the most conservative projections estimate we'll run out. Either we stop using them or we won't be around or in any condition to use them.


    [ Parent ]
    Natural gas is scary. (2.66 / 3) (#25)
    by marlowe on Thu Jan 18, 2001 at 06:41:48 PM EST

    Every once in a while, it just decides to blow some building and its occupants to smithereens.

    Sometimes it can't even wait till it's been taken out of the ground.

    -- The Americans are the Jews of the 21st century. Only we won't go as quietly to the gas chambers. --

    Two things.. (4.40 / 5) (#29)
    by enry on Fri Jan 19, 2001 at 10:23:40 AM EST

    First, Natural Gas is *usually* cheaper. This year is pretty bad, as the rates for NG have been high since the summer. Oil is up too, but not as much as last year (BTW, I live in eastern MA, and had a similar dilema when I moved into my house).

    The other thing to remember is that Oil is about 75-80% efficient, or at lesat mine is. Newer ones can get into the high 80s, low 90s. Natural Gas gets into the high 90s for effieiency, such that the ventilation for the furnace is a PVC pipe that runs outside the house.

    This means you can see anywhere up to a 25% savings going to gas. The other bit of interesting is at least in my area, the gas company will pay for the heater, which will save anywhere up to $3000 that also has to get factored in. At $80/year, it will take many years for the savings of oil to pay for the heater. 37 to be precise.

    Oh, and what did I do? Keep the oil for now. I'm planning on putting an addition to my house this year or next. At that time, I'll need a new furnace, and I'll put in a gas heater.

    Thoughts on efficiency (none / 0) (#30)
    by DesiredUsername on Fri Jan 19, 2001 at 11:02:54 AM EST

    "The other thing to remember is that Oil is about 75-80% efficient, or at lesat mine is. Newer ones can get into the high 80s, low 90s. Natural Gas gets into the high 90s for effieiency..."

    This is exactly what I was getting at in my original post. Is "148,000 BTU/gal for oil" a theoretical maximum or an actual number for some average furnace (presumably operating around 85-90% efficiency)? If the former then I can definitely see that gas would be cheaper. For example:

    Let's say two identically priced oil and gas furnaces were 90% and 98% efficient respectively. Then the 1000 gal of oil would only get me 90% of 148,000,000 BTUs or 133,000,000 BTUs. 133,000,000 is in turn 98% of 136,000,000 so I would need 1360 "therms" of gas at a rough cost of $1360 (vs the constant $1400 of gas).

    But notice that even 8 percentage points of eff diff only result in a savings of $40 over a year. Of course, the efficiency numbers, the price of oil and the avg gas price are all more or less pulled out of my ass...

    Play 囲碁
    [ Parent ]
    Natural Gas (5.00 / 1) (#32)
    by Alarmist on Fri Jan 19, 2001 at 01:40:01 PM EST

    There's some anecdotal evidence where I live that natural gas really isn't cheaper. A lot of people have been hit with steep gas rates in the past couple of weeks. Granted, I live in the South, and a lot of these people seem to think they'll freeze to death if the temperature drops below 65. At least one poor person had a gas bill of $886, and a doctor (everything that could be gas in his home was; oven, stove, water heater, etc.) had a gas bill of about $1500.

    Your mileage may vary, of course.

    Is Natural Gas Really Cheaper? | 32 comments (32 topical, 0 editorial, 0 hidden)
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